Interview with sochin8 (DARWIN SCN)

22 August 2018

The Market Owl

sochin8 is the trader behind DARWIN SCN. This DARWIN has been listed on the DARWIN Exchange since the Summer of 2017 and since the beginning of 2018 has had a D-score over 70. It’s included in the default filters “Under the radar” and “Good scores“.

Register for the webinar if you want to master the basics of being a successful trader at Darwinex.

sochin8, tell us a little about yourself. How did you get started and how long have you been trading for?

My name is István, I’m 50 years old and I have 9 years of experience in forex.

In the first years successes followed failures and vice versa. Now I know that my successes were due to the market’s “generosity” as I committed fundamental errors.

I learnt a lot from my failures, most of all about myself. With time I came to the conclusion that I’m the sole responsible for my errors. Not the broker, not the market, not others… only me.

This discovery led me to initiate a road as much exciting and liberating as full of pitfalls. But I was sure of one thing: I would go down this road.

We’d like to congratulate you on the fact that your DARWIN SCN has a score over 8 in 9 of the 12 Investable Attributes. What do you think these excellent scores in risk management, timing and consistency are due to?

During the long years I’ve learnt some very important basic principles. There are strategies that one must avoid at all cost, like martingale, grid, hedging, averaging, arbitrage, etc. I never use those!

Except those, you can use the strategy you want, like scalping, breakout, trendfollowing, etc., if you spend enough time and effort (analysing, testing, trying out new ideas, looking for relationships) it’s only a question of time that you produce benefits.

Factors that make a strategy work are rigorous risk management, perseverance, consistency and patience. All the rest are consequences.

It’s these consequences that the Darwinex software analyzes and disassembles in the form of attributes.

Talking about Investable Attributes Os and Cs, according to our algorithms, your strategy surpasses all 10 simulations that enter and exit a bit earlier and later than SCN. Do you have any secret you’d like to share in relation to your entry and exit timing?

After many thousands of trades I realized how important it is to minimize execution times. A fast VPS and a dedicated server are fundamental tools for successful trading.

Observing the Rs atribute, one can see that your VaR has been gradually descending in the last months. Have you changed your trading style compared to 2017?

Given that the market changes constantly, I’m also constantly analyzing my trades of the last months.

When I observe descending benefits or see a turn into losses, I identify the causes and either modify the strategy or halt it altogether. That’s what I did also after analyzing 2017.

Your Loss Aversion score is 5.8, basically due to some positions with negative excursions of -2% and -3% while normally your negative excursions don’t surpass -1% of your equity after adjusting to a monthly VaR of 10%. What happened the night after July 10th on the EURAUD and AUDCAD pairs?

The AUD “was hurt” by a declaration of the US president Donald Trump about the US planning to release $200B in China tariffs. This exists and I got hurt by it ☺… my stops on AUD pairs got triggered ☹. I have no strategy that could protect me from this kind of rare and unknown events.

We see you’re a scalper whose trades have an average duration of 36 minute with an average TP of 2.29 pips and SL of -4.2. Additionally, most of your trades are realized between 20:00 and 23:00 GMT. What have you found in scalping and in this hours of the day, to make SCN a profitable DARWIN with a return/risk ratio above 1?

I’ve used other strategies different from scalping for years, like breakout, trendfollowing, etc. But something has changed on the market in the last 3-5 years. Before, an NFP was followed by movements of 100-150 pips, e.g. on the EURUSD. Today, we’re lucky if there’s a movement of 10-20 pips.

These changes did not favor the before-mentioned strategies. Under current circumstances, what’s left for me is scalping.

In the hours of the day you mention, many successful strategies scalp, taking advantage of the movement of a less liquid market between New York close and Australia open.

It would be long to do a detailed analysis of the strategy, the determination of its entries and exits… I won’t talk about that as I don’t have the Holy Grail.

As each of us has a different risk tolerance, a strategy that’s successful in my hands can be less successful or even turn into losses in the hands of another trader or at a different broker.

There isn’t a system that if you follow it, gives you benefits for sure. Each of us has to go down this way in his own.

My results are adequate for me, this is why I use the strategy I use but one must watch out as change is constant.

What is the most important lesson you have learnt in your trading career?

The most important lesson is that one can control only one variable: the risk. Without a good risk management, including bearing that risk psychologically, it’s not possible to be profitable on the long run. Because on the market 4 is not 2+2 but rather 5-1.

Any books you like to recommend to fellow traders?

There are thousand of books and texts about trading but in my experience, beyond the most basic concepts, real knowledge can’t be obtained from book or conferences.

A text I do recommend oftentimes to novice traders is from an anonymous author and is called “The 38 steps of becoming a successful trader” (it’s in Hungarian, I don’t know of any translation into English). I saw myself reflected in each and every one of the steps ☺! It helped me to know in which step I am on this long road that often seems to be a labyrinth.

Thank you for the interview sochin8!

Thank you for the opportunity.

Any specific questions you would like to ask sochin8? Leave them as comments and we’ll try to get you the answer!

Register for the webinar if you want to master the basics of being a successful trader at Darwinex.

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asdr34

26 October 2018

I am a happy investor of $SCN and I noticed divergence getting too high lately. Have you thought/have plans to do something about it or you think that nothing can be done?
-1% on the monthly is pretty serious to be honest. Also, it would be great if you could make a thread and participate in the community forum of Darwinex.

We've already talked to sochin8.
Reducing divergence would imply that he changes his trading style (scalping) which is not something he is planning to do (see "what’s left for me is scalping" in the interview). Moreover, he's scalping in the period around market close - there's simply no liquidity on the market to replicate investors' trades without investors getting a systematically worse price.
As an SCN investor, you're doing the right thing by closely monitoring your investment's divergence and you should also include the new graph showing evolution of divergence over time into your analysis of SCN.
As to the community forum post, we're afraid there are language issues preventing sochin8 from actively participating.

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